$C$ and $D$ are equal partners in the $CD$ partnership. $C$ starts the year with an $AB$ of $300$ in his partnership interest while D starts the year with an AB of $600.$ The partnership distributes cash of $200$ and inventory, AB $450$ FMV $500,$ to C and cash of $200$ and land, AB $300,$ FMV $700,$ attached liability $200,$ to D $.$ The partnership continues operation thereafter. What consequences to the parties?